Attorney General's News Release

February 7, 2008

Nixon obtains permanent injunction, restitution against Kansan connected with land tax sales in Jackson County

Kansas City, Mo. — A Jackson County Circuit Court today permanently prohibited a Kansas man, Cyrus D. Contractor, and his businesses National Recovery Title and Property Clearing House, from any future land tax sale and also ordered them to pay $30,000 in consumer restitution, under a consent judgment and permanent injunction obtained by Attorney General Jay Nixon.

Nixon sued Contractor of Lenexa, Kan. and several other defendants in August 2006, alleging they used misrepresentations to deceive more than 50 people — some of whom were elderly or ill — who had property sold on the steps of the Jackson County courthouse in land tax sales. The victims signed papers that resulted in them being paid pennies on the dollar for excess proceeds from the sales. The Attorney General obtained a preliminary injunction against Contractor in October 2006.

“The victims in these cases did not realize what they were signing away,” Nixon said. “The defendants took advantage of that confusion and didn’t tell the consumers that they have been entitled to the excess proceeds. Today’s court order puts a permanent stop to those practices.”

Nixon says the victims would receive small amounts — typically from $100 to $500 — in exchange for signing over assignment of rights, warranty deeds or quit claim deed that enabled the defendants to seek thousands of dollars in excess proceeds. Some victims were led to believe the defendants were interested in purchasing the property.

Land tax sales are used in Missouri to satisfy delinquent taxes on real estate and, in many counties, take place on the courthouse steps after notices are posted in local newspapers. Proceeds of the sales are first used to pay the delinquent tax bills and the costs of holding the sales. The circuit court then determines how the excess proceeds will be distributed; parties that want to apply for excess proceeds must submit a form for the court’s consideration. Unclaimed proceeds go back to the state after two years.

Under today’s court order, the defendants are prohibited from selling, offering for sale or providing any person the payment of money or other valuable goods and service in exchange for the signing or execution of assignments, deeds, warranty deeds, quit claim deeds or contracts which would limit the person’s property at a land tax sale. The defendants are also ordered to pay $30,000 in restitution, including a lump-sum payment of $25,000 due within 10 days.

Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to Press Secretary John Fougere.

E-mail      Phone: 573-751-8844         Fax: 573-751-5818